Piqued by piracy

The US is hopping mad about Chinese outfits copying and selling American products

Published: Tuesday 31 January 1995

-- (Credit: Rustam Vania)STILL reeling from an unsuccessful bid to join the World Trade Organization (WTO) just before it became operative on January 1 this year, China has nevertheless signalled its intention to keep plugging away. But with the US sticking to its stubborn stand on intellectual property rights and greater trade access, the path ahead is, mildly put, inhospitable.

Furious over China's refusal to make any serious commitment on the legal protection of intellectual property rights, the us suspended negotiations on the issue in mid-December 1994. In the first week of January 1995, us trade representative Mickey Kantor slammed China with a February 4 ultimatum to demonstrate its seriousness. The Clinton administration published a list of us $2.8 billion worth of Chinese exports to the us -- including electronics, footwear and toys -- subject to tariffs of up to 100 per cent.

For once, such strongarm tactics are making the Chinese squirm. And mad. Beijing warned that it would retaliate against the us, which has several business setups in China, including automobiles, and alcoholic and other beverages. "We are open to future negotiations, but we will not bend under any pressure," said an unidentified senior Chinese trade negotiator, quoted by the official China Daily newspaper. Tempering the threat with characteristic unpredictability, however, Song Jian, Chinese minister of the state commission of science and technology, held out a conciliatory assurance that China would penalise the pirates. In what some see as a gesture of good intent, in early January this year, a court sealed 3 porcelain factories in Guangdong for infringing Chinese patents. The government has also ordered a boycott of pirated goods.

The politically powerful us corporate sector is unsheathing its armoury because a huge array of its products -- compact disks, software, pharmaceuticals, films and books -- are copied closely and sold not merely in China, but in booming markets like Hong Kong, Southeast Asia -- and in the us as well. Among the pirated brands are those that the US considers a sacrosanct part of its social identity -- Microsoft (see box), Walt Disney, Levi's and Kellogg's.

In 1992, a pact was negotiated between the 2 countries in which China pledged to seize pirated goods. us officials, however, say that over the past 18 months, the number of illicit compact disk factories in China has mushroomed from 15 to 29. "If China can't implement agreements we've already signed, it shakes our confidence," said a senior us trade official quoted in The Asian Wall Street Journal.

China's exclusion from the prestigious wto comes as a dishonourable -- if temporary -- jolt to the world's most populous nation. For 8 years now, it has been striving to regain gatt membership it disdainfully relinquished when it walked out in 1950 soon after the Communists assumed power. Now, the West is obviously tasting sweet revenge.

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